Bridging the gap between old and new homes

If you find yourself with two properties and two mortgages to pay, you’ll need to investigate your options. One option is checking if the seller will allow an extended settlement period, giving you more time to find a buyer for your current home. Or, you could also look into bridging finance.

What is a bridging loan?

A bridging loan, or bridging finance, is a short term loan typically with a term of six to 12 months, which covers both the existing and new debt.

Do your homework on loan features, conditions and structures because they vary between lenders. For example, some lenders will request regular repayments for both the new and existing debt, which can create significant financial strain. Other lenders may add the new debt’s interest payments to the total loan balance for the next home but allow the borrower to hold payment until the first home sells.

Also, be realistic about the price you expect for the first property. You may need to lower your expectations in order to meet your bridging finance period and/or to sell sooner.

Thanks for your enquiry. We'll match you up with your local Mortgage Choice broker who will get in touch with you soon!

Talk to a Mortgage Choice expert

Established in 1992 by brothers Rod and Peter Higgins, Mortgage Choice was founded with the aim to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.

Since that time, we have grown and developed into a fully fledged financial services provider, and our founding principle remains very much at the heart of what we do.

Over 25 years of industry experience has taught us that you want advice you can trust and understand, from experts who have your best interests at heart. We now have the ability to deliver this across various financial products, including home loans, financial planning, car loans, personal loans, commercial loans, asset finance, deposit bonds, as well as risk and general insurance.

Disclaimer

The information provided on this website is for general education purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should consider the appropriateness of the advice to your own situation and needs before taking any action. It should not be relied upon for the purposes of entering into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement with regard to your personal circumstances, before making any decision about whether to acquire the product. You can obtain a copy of the PDS by emailing info@mortgagechoice.com.au or by calling 13 77 62.

#The comparison rate provided is based on a loan amount of $150,000 and a term of 25 years. WARNING: This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.